Sun, 29 Apr 2007

I just saw Hot
Fuzz (I'd link to their website, but it requires Flash 9). It
seems like a rather libertarian movie to me. First is the emphasis on
the intrinsic value of the individual, and explicit rejection of "For
the Common Good". Second is the respect for the exemplary individual
and denigration of the idea of "the curve buster" -- the person who
does so well that they make everybody else look bad. Third is the
reluctance to rely on violence to get one's way. Fourth is the
respect for the Rule of Law.

Thu, 26 Apr 2007

Boy, after reading Samuelson's April 30
Newsweek column, I have to question his right to the name
"economist". First, he pursues the common wisdom that inflation is
caused by higher prices. It isn't. Inflation is everywhere and
always caused by an increase in the supply of money. Money is
just a thing that people are always willing to trade for because
people are always willing to accept it. There's a supply and demand
for money, and, yes, a price of money.

But here's the thing you need to remember: the only reason there is
sustained inflation is because the government is always creating more
money. It does so because it gets to spend the money first. It's a
tax that nobody notices, if they even understand it. So Samuelson's
discussion of oil prices, food prices, and core CPI is pretty much a
waste of time, space, and print.

Second, he talks about recession. It's clear to any real
economist that the Fed causes these recessions through its
manipulation of the supply of money. When it inflates the money more
than people expect, they think they have more cash, so they go
spending. Business owners see a higher supply of money, and they
think that they should invest. Unfortunately, both of them are wrong,
and they need to adjust their spending downwards when the Fed reduces
the rate of inflation.

I'm talking about the rate of inflation, because people get used to
a certain rate of inflation. If you want to get the higher employment
effects of inflation, you need to continue to raise the rate of
inflation. Not just inflate, but inflate more and more. That's what
von Mises called the crack-up
boom". Eventuall the transaction cost due to the rate of increase
exceeds the value of most transactions, so the economy stops in its
tracks and falls over, dead.

Third, he worries about the U.S. trade deficit. "Trade deficit" is
a misnomer (and although he's talking about terminology problems in
this article, he doesn't catch this one.) There is no such thing as a
trade deficit. All free trade is balanced; deficit is not possible.
The term "trade deficit" really means that we're selling people things
inside the US more than we're selling things to be delivered to
people. As such, it's not much cause for worry.

Mon, 23 Apr 2007

NEW YORK, NY (1010
WINS) -- Even in a city where a closet-sized apartment can fetch a
mint in rent, where so-so condos sell for over $1 million, and where
real estate speculators salivate over the very air, there is property
that lays fallow.

An informal survey released Saturday revealed there are at least
505 undeveloped lots in Manhattan, and another 1,723 that appear to be
vacant, Manhattan Borough President Scott M. Stringer said.

``These results show that, contrary to popular belief, there are
thousands of properties lying vacant in this borough,'' Stringer
said. ``Now the task is to find out why and to do everything we can to
make them productive properties.''

Stringer said there is enough space on these lots to create nearly
24,000 housing units that could help meet the city's future population
growth.

According to the survey, 50 percent of the vacant properties are
privately owned. More than 71 percent were found north of 96th Street,
a traditional dividing line between the poorer neighborhoods of Upper
Manhattan, and the ultra-wealthy Upper East and Upper West sides.

At least $104.8 million in property taxes is lost annually the
survey found, Stringer said.

The article doesn't attempt any explanation at why so much
property is going unused. A moment's economic analysis, however, will
tell you that it can only be caused by rent control. No sane property
owner will bother to build a building if he cannot make a profit. The
specter of rent control looms over every potential landlord in NYC,
whether their property is afflicted or not. As long as people in NYC
think rent control is a good thing, any building might be subjected to
rent control, even if some are currently exempted. See Walter
Block for more information.

This is yet another example of how price floors and price ceilings
cause surplusses and shortages respectively. When the government
fixes prices, you get the same bad effects as when any other monopoly
fixes prices. I don't understand why people see private monopolies as
good, and public monopolies as bad. I suppose their theory is that
they control their government, but, really, when was the last time you
wrote to your legislator asking him to do something, and he
actually did what you asked? Usually I get a letter back
explaining how my legislator will be doing the exact opposite.

Fri, 20 Apr 2007

I'd like to point out that the VT Massacre is a failure of gun control.
If anybody attempts to misuse the Massacre to call for more gun control,
they should first explain why the gun control already in place didn't work.
Then they should watch Penn and Teller's Gun Control is Bullshit.

Wed, 11 Apr 2007

I spit on Marx's grave today. I had a 10 hour layover in Heathrow
on the way back from Mumbai. Walked around Hampstead Heath, and wound up in
Highgate Cemetary (East). Interestingly, his grave is immediately opposite
Herbert Spencer's
grave. That's nearly as amusing as it would have been to bury Marx next
to Adam Smith. Maybe they put Spencer across from Marx to keep a wary
eye on him?